Factor Affecting Job Satisfaction in Banks

A Banker on whom a curb is drawn should yield the arrest when it is presented for wages. * This chit compensable(a) move is a distinguished one of a banker. * This obligation has been imposed on him by sec. 31 of the N. I dress, 1881. * A banker is bound to repay his nodes check up on, to the extent of the gold available and the existence of no profound bar to defrayment. Again, for making compensation the cheque must(prenominal) be in order and it must be duly presented for defrayment at the outgrowth where the account is kept. * The stipendiary banker should put on reasonable c atomic number 18 and diligence in paying a cheque, so as to abstain from each(prenominal) exploit wish wellly to damage his clients credit. * If the paying banker wrongfully appalls a cheque, he will be asked to pay heavy damages. * At the similar time, if he makes hire in a hurry, even when there is able vestibular sense, the banker will non be allowed to debit the customers account.If he does so, it will make sense to sanctioning of everyplacedraft without prior arrangement, and later on, the customer toilet conduct it as precedent and compel the banker to pay cheque in the absence of sufficient balance. His position is very precarious and is in betwixt the devil and the deep sea. PRECAUTIONS BEFORE HONORING A CHEQUE In order to safeguard his position, the paying banker has to observe the following precautions before accoladeing a cheque. Presentation of The Cheque (a) Type of the cheque in the beginning honouring a cheque, he must find out the type to which it belongs.Cheques may generally be of two types- equal to(p) or crossed. If it is an open one, the payment may be do at the counter. If it is crossed, the payment must be made simply to fellow banker. If it is specially crossed, the payment must be specializedally made to that banker in whose favour it has been crossed. If there are A/C Payee and non Negotiable crossings the paying ban ker need not worry, as they are the directions besides to the imbibeing banker. If the paying banker pays a cheque contrary to the crossing, he is apt(predicate) to the draftsman. Therefore, he must pay special attention to the type of a cheque. b) Branch The Paying banker should image whether the cheque is drawn on the tree branch where the account is kept. If it is drawn on anformer(a) branch, without all prior arrangement, the banker target safely transcend the cheque. (c) Account Even in the same branch, a customer might produce opened two or much accounts. Hence, the paying banker should see that the cheque of one account is not apply for withdrawing coin from another account. (d) Banking hours The paying banker should also note whether the cheque is presented during the banking hours on a business day. allowance outside the banking hours does not measuring to payment in due course. e) Mutilation If a cheque is snap into pieces or off or mutilated, then, the payi ng banker should not honour it. He should return the cheque for the drawers confirmation. In a fibre cheque is torn accidentally, the drawer must confirm it by writing much(prenominal) dustup as Accidentally torn by me and affixing his full tactual sensation. A cheque torn into two or more than pieces is generally returned with a honour Mutilated. Form of cheque Printed form The cheque must be in proper form. It must satisfy all the requirements of law. The customers should draw cheques that on the printed leaves supplied by the bankers.Unconditional order The cheque should not contain either condition. If it is a conditional one, the paying bankers position will begin critical and he may not honour it. Date Before honouring a cheque, the bank must see whether there is a expect care on the instrument. If it is undated, it basinnot be regarded as a valid instrument. If a cheque is ante- dated, it may be salaried if it has not become stale by that time. A cheque, which is presented after six months, from the date of its issue, is a stale one. If a cheque is post- dated, he should honour it besides if(prenominal) on its due date.Amount The near important precaution is that the banker should see whether the amount stated in the cheque, two in words and figures, agree with each other. If the amount is stated only in figures, the banker should return it with a remark Amount required to be stated in words. However if the amount stated only in words, the banker may honour it. Supposing , there is a difference in the amount stated in words and figures, then the banker jakes take any one of the following courses available to him i) He can attack the cheque with a memorandum words and figures differ or i)He can honour the amount stated in words According to Sec. 18 of the N. I. Act, if the amount beneathtaken or ordered to be pay is stated other than in figures and words, the amount stated in words shall be the amount undertaken or ordered to be p aid. However in practice, if the difference is insignificant, payment is sometimes made. But usually the paying banker returns the cheque under such circumstances, since there is an audit objection to the practice of honouring such cheques. III. Sufficient balance There must be sufficient balance to meet the cheque.If the funds available are not sufficient to honour a cheque, the paying banker is justify in returning it. So, before honouring a cheque, he must check up the present state of his customers account. IV. Signature of the drawer The succeeding(prenominal) important duty of a paying banker is to compare the signature of his customer found on the cheque with that of his specimen signature. If he fails to do so and if he pays a cheque , which contains a forged signature of the drawer, then, the payment will not amount to payment in due course. Hence, he can not claim tax shelter under Sec. 85 of the N. I. Act.If the signature has been too aptitudefully forged for the bank er to find it out, even then the banker is liable. However, if the customer facilitates the forgery of his signature by his conduct, then, the banker will be relieved from his liability. statutory bar The existence of legal bar like dress tell limits the duty of the banker to pay a cheque. Garnishee order refers to the order issued by a court attaching the funds of the judgment debtor (i. e. , the customer) in the detention of a third party (i. e. , the banker). The term Garnishee refers to the somebody who has been served with the order.This Garnishee proceedings comprise of two standards. As a first step Garnishee Order Nisi will be issued. Nisi mode unless. In other words, this order gives an opportunity to the banker to prove that this order could not be enforced. If the banker does not make any counterclaim, this order becomes absolute one. This attach Order absolute actually attaches the account of the customer. If it attaches the whole amount of a customers account, the n, the banker must put down the cheque drawn by that customer. He can honour his cheques to the extent of the amount that is not garnished. irregularBefore honouring a cheque, the banker must verify the method of authorisation, if any, that appears on the instrument. It is more so in the casing of an order cheque, which requires an endorsement before its delivery. For instance, if there is per pro endorsement, the banker must find out the existence of authority. Failure to do so constitutes negligence on the part of the paying banker. Per pro endorsement is an endorsement made by an authorized agentive role. Prior avowation approximately the delegation of authority to the agent must engage been condition to the banker. Otherwise, a banker is not legally bound to accept this type of endorsement.CIRCUMSTANCES UNDER WHICH A CHEQUE CAN BE DISHONORED Countermanding Countermanding is the instruction given by the customer of a bank requesting the bank not to honour a particular che que issued by him. When such an order is received, the banker must deny to pay the cheque. If a customer informs by telephone or conducting wire regarding the stopping payment of a cheque, the banker should diplomatically jibe the payment, till write instructions are received. If the situation is very critical, he can return the cheque by giving a suitable answer like payment countermanded by telephone and postponed pending confirmation. Therefore, countermanding instructions, once received, must be kept as a constant record. A stopped payment register may be maintained for ready reference. Upon the know of chance on of termination of a customer When a banker receives written information from an classic microbe, (preferably from the nearest relatives) regarding the death of a particular customer, he should not honour any cheque drawn by that deceased customer. If the banker is unaware of the death of a customer, he may honour the cheque drawn by him.Death puts an automatic end to the contractual relationship between a banker and his customer. Upon the receipt of notice of insolvency Once a banker has knowledge of the insolvency of a customer, he must refuse to pay cheques drawn by him. Upon the receipt of notice of aberration Where a banker receives notice of a customers insanity, he is justified in refusing payment of the cheque drawn by him. The banker should make a careful note, when the lunacy order is received. It is advisable that the banker should act upon a explicit proof of the customers insanity like a cooks certificate, a court order etc.Upon the receipt of notice of subsidisation The bank balance of a customer constitutes an asset and it can be assigned to any person by giving a earn of assignment to the banker. Once an assignment has been made, the assignor has no legal rights over the bank balance and therefore, if any cheque is drawn by him, the banker should refuse to honour it. When a breach of trust is intended In the case of a trust account, mere knowledge of the customers plan to use the trust funds for his ain use, is a sufficient reason to dishonour his cheque.Defective title If a person who brings a cheque for payment has no title or his title is defective, the banker should refuse to honour the cheque presented by him. For instance, a person who brings a cheque, which has been countermanded or which has been forged, has no title to it. statutory security system to a Paying Banker Supposing, a paying banker pays a cheque, which bears a forged signature of the payee or endorsee, he is liable to the true proprietor of the cheque. But, it is quite unjustifiable to make the banker responsible for such errors.It is so because he is not expected to know the signature of the payee or the endorsee. Therefore, law relieves the paying banker from his liability to the true owner in such cases. This relief is cognize as statutory protection. To claim protection under Sec. 85 of the N. I. Act, 1881, the banke r should have fulfilled the following conditions * He should have paid an order cheque. * much(prenominal) a cheque should have been endorsed by the payee or his order. * It should have been paid in due course. PAYMENT IN DUE COURSE The cheque should have been paid in due course as per Sec. 0 of the N. I. Act. This concept of payment in due course has three prerequisite features (I) Apparent tenor of the instrument To avail of the statutory protection, the payment should have been made according to the apparent tenor of the instrument. The apparent tenor refers to the intention of the parties, as it is evident from the event of the instrument. Example If a drawer draws a cheque with a post date, his intention is to make payment only after a certain date. If it is paid before the due date, this payment does not amount to payment in due course.So also, the payment of a countermanded cheque does not amount to payment in due course. (ii) Payment in ripe(p) faith and without negligen ce Good faith forms the floor of all banking transactions. As regards negligence, the banker may sometimes be careless in his duties, which constitutes an act of negligence. If negligence is proved, the banker will loss the statutory protection given under Sec. 85. Example * Payment of a crossed cheque over the counter. * Payment of a post-dated cheque before maturity. * Failure to verify the regularity of an endorsement. iii)Payment to a person who is entitled to receive payment The banker must see that the person, who presents the cheque, is in possession of the instrument and he is entitled to receive the amount of the cheque. Protection to a bearer cheque Now this protection has been all-encompassing to bearer cheques also under sec. 85(2). If a bearer cheque is paid in due course, the banker is entitled to get protection. Statutory Protection in the case of a Materially Altered Cheque A paying banker cannot normally claim any statutory protection for a materially altered cheq ue. However Sec. 89of the Negotiable instrument Act.Gives protection in the case of a materially altered cheque provided, (1) He is liable to pay, (2)Such an novelty is not apparent and, (3) The banker has made the payment in due course. recuperation of Money Paid by Mistake Under the following circumstances, money wrongly paid can be recalled- (i)Money received mala fide is redeemable When a person receives money by mistake in distressing faith, knowing that he is not entitled to receive that money, then, the banker is entitled to recover the same. (ii) Money paid under a mistake of accompaniment is recoverable For instance, a banker pays money to X, thinking that he is Y.This is a mistake of fact regarding the identity of the parties. Y is under a legal duty to pay the money back to the banker. COLLECTING BANKER A compendium banker is one who undertakes to collect the amount of a cheque for his customer from the paying banker. In solicitation a cheque, the banker can act i n two capacities namely (1) as a holder for value, and (2) as an agent for collection. The banker would be as a holder for value (a) If he allows his customers to withdraw money before cheques paid in for collection are actually placid and credited. b) If any open cheque is accepted and the value is paid before collection, and (c) If there is a reduction in the overdraft account of the customer before the cheque is collected and credited in the respective account. In all these cases, the banker acquires a personal interest. A Banker as an agent In practice, no banker credits a customer account even before a cheque is collected. He collects a cheque on behalf of a customer. So, he cannot acquire any of the rights of a holder for value. He has to act only as an agent of the customer. Duties of A salt away Banker i) Exercise reasonable care and diligence in his collection work When a banker collects a cheque for his customer, he acts only as an agent of the customer. He should exerci se reasonable care, diligence and skill in collection work. (ii) Present the cheque for collection without any clutches The banker must present the cheque for payment without any delay. If there is delay in presentment, the customer may suffer losses due to the insolvency of the drawer or insufficiency of funds in the account of the drawer or insolvency of the banker himself. In all such cases, the banker should bear the loss. iii) Notice to customer in the case of dishonour of a cheque The N. I. Act has prescribed a reasonable time for giving the notice of dishonour. If he fails to do so, and consequently, any loss arises to the customer, the banker has to bear the loss. (iv) Present the identity card for acceptance at an proto(prenominal) date As per sec. 61 of the N. I. Act, a bill of exchange must be accepted. If a banker undertakes to collect bills, it is his duty to present them for acceptance at an early date. (v) Present the bill for payment The banker should present the bills for payment in proper time and at proper place.If he fails to do so and if any loss occurs to the customer, then, the banker will be liable. According to Sec. 66 of N. I. Act a bill must be presented for payment on maturity. (vi) dissent and note a foreign bill for non-acceptance In case of dishonour of a bill by non-acceptance or non-payment, it is the duty of the ingathering banker to inform the customer immediately. Generally he returns the bill to the customer. In the absence of specific instructions, collecting bankers do not get the inland bills far-famed and protested for dishonour.If the bill in question happens to be a foreign bill, the banker should have it protested and noted by a notary public and then forwarded it to the customer. Statutory Protection to the collecting Banker According to sec. 131 of the N. I. Act, statutory protection is available to the collecting Banker in the following cases (i)Crossed cheques only a collecting banker only for crossed chequ es can claim statutory protection. It is so because, in the case of an open cheque, it is not absolutely necessary for a person to seek the service of a bank. ii) Collections on behalf of customers as an agent a banker only can claim the above protection for those cheques collected by him as agent of his customers. iii) In good faith and without negligence In order to get the protection under this section, a collecting banker must act in good faith and without negligence. Matter of negligence is of great importance. Basis of negligence When a collecting banker wants to claim protection under Sec. 131, he has the burden of proving that he has acted without negligence.Gross negligence If a banker is completely careless in collecting a cheque, then, he will be held liable under the ground of common negligence. Examples hoard a cheque crossed A/C payee for other than the payees account Account payee crossing is a direction to the collecting banker. If he collects a cheque crossed A/C payee for any person other than the payee, then, this fact will be proved as an distinguish of gross negligence. FAILURE TO VERIFY THE CORRECTNESS OF ENDORSEMENT If a banker omits to verify the correctness of endorsements on cheques collectable to order, he will be deprived of the statutory protection. i)Failure to verify the existence of authority in the case of per pro signatures If a collecting banker fails to verify the existence of authority in the case of per pro signatures, if any, will be proved as an evidence of gross negligence. (ii) Negligence connected with the immediate collection If, on the face of a cheque, there is a warning that there is misappropriation of money, the collecting banker should make some reasonable enquiry and only after acquiring some satisfactory explanations, he can proceed to collect cheques.Examples * Collecting a cheque drawn against the principals A/c, to the hole-and-corner(a) A/c of the agent without enquiry. * Collecting a cheque payable to the firm to the private A/c of a partner without enquiry. * Collecting a cheque payable to the company to the private account of a director or any other officer without enquiry. * Collecting a cheque payable to the employer to the private account of the employee would constitute negligence under sec. 131 of the N. I. Act. * Collecting a cheque payable to the trustee, to the private account of the person operating the trust account is another instance of negligence of a banker. iii) Negligence under Remote Grounds Normally, we cannot expect a banker to be liable under certain circumstances. But, the bankers have been held negligent under those situations, which are branded as remote grounds. Examples * Omission to obtain a earn of introduction from a new customer causes negligence. * Failure to enquire into the source of supply of large funds into an account, which has been kept in a unfortunate condition for a long time, constitutes negligence.